Customer Value Tip #4: Win-Back
Going beyond the customer lifecycle
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The customer lifecycle stages
The Customer Lifecycle can be depicted in a number of key phases and stages.
The number and descriptions of these can vary slightly, depending on who you ask and whether we are within a pre-sales, sales or post-sales environment.
When focussing on prospective customers, we are in a pre-sales or sales environment. Once interaction with customers commences, the customer lifecycle stages might look like this:
Stage 1. Reach - communication with prospective customers
Stage 2. Acquisition - engaging and educating customers about our product/service
Stage 3. Conversion - the sales process of turning the prospects into customers
Once the sale is completed and we have a new customer, we move into a post-sales environment. What follows is a number of customer lifecycle management (CLM) stages. Again, the construct of these can vary slightly depending on industry, business model and customer type (B2C vs B2B).
New customersStage 4. Onboarding
Stage 5. Activation
Existing customersStage 6. In-Life
Stage 7. Decline / Inactivity
Stage 8. Attrition/Retention
The customer lifecycle can be visualised in a diagram or graphical illustration to provide executives and managers with a handy tool to help with customer value management (CVM) planning and journey & campaign design.
Customer value by resurrection
There is a concept called “Win-Back", which refers to communication and engagement strategies that aim to influence the customer to turn them into an active, engaged or spending customer again.
Sometimes win-back can refer to re-activating current customers who are simply inactive or dormant users (short or long-term non-usage). I would classify an attempt to drive usage for such customers as re-activation and my personal definition of win-back relates to customers that have already closed their account or unsubscribed.
The difference with this set of customers is that they should already be past the point of an unsuccessful retention attempt and the business has exited the relationship with the customer.
The reason why this is important and can easily be forgotten about is because former customer volumes are unlikely to appear on a company’s financial performance / KPI trackers, so the next question is:
How big is the cumulative customer volume of closed accounts, and which parts are most attractive to attempt to re-acquire?
3 steps to succeeding with customer win-back
1. Data analysis
First, gather up all data you can find on customers that have previously closed / unsubscribed from your offering. At this point, you may also discover some really interesting insights about the underlying reasons for closure.
Retention insights data is often presented in small batches as closures data trickle in, whereas in a win-back scenario you have the chance of trawling through a substantial volume of past closures in one big chunk.
This is potentially valuable information both for designing a better targeting of the win-back campaign, but also from a strategic standpoint, as you will be able to understand the historic reasons why these customers closed and use the customer feedback to improve any potential issues across your product, processes, policy or people.
Bonus tip: Armed with this information, you might also want to put in place an ongoing feedback loop back to the relevant areas where there might have been a contributory reason to the customer closures (e.g. price too high, not happy with product features etc).
Also, you will want to analyse the data set and generate a set of performance KPIs for the accounts so that you can create a well-informed view of this population.
2. Segmentation
Secondly, look at the broad and diverse range of performance KPIs that you have extracted and then start choosing your most relevant metrics and filter the data. Cut down the large data-set according to your desired criteria for the win-back campaign.
You might not want to target every single customer that has previously closed and invite all of them back to your current product offering.
It makes sense to naturally exclude certain type of customers, for reasons such as:
Customers who might have filed a complaint in the past
Unprofitable or risky accounts
Previously inactive accounts
Accounts that no longer fit your current target customer profile
Basically, you’re looking for the cream of the crop amongst your past customers and will want to re-invite these back to your business.
3. Execution
Finally, you now have a segmented data set with the customers that you want to try to re-acquire. To increase the chances of a successful win-back outcome, I would suggest the following approach:
Test the waters first with a small sample of your target population to see how they react to your company contacting them again.
Consider using different communication channels, depending on client value. For example, if you have 100k consumer accounts and 100 large B2B accounts to deal with, you may want mass-email to the consumer segment, but directly approach each large customer with a personalised 1:1 outreach).
Once customers are re-boarded, monitor performance closely for any relapse behaviour to ensure that you’re not throwing good money after bad. Remember that all of these customers closed once before for a reason. You are minimizing the chances of this reoccurring through the segmentation / filtering approach above, but do keep an eye on it still as it may play out differently to what you expect.
Summary:
Customer-win back is an activity that is easy to forget about because it sits beyond the end of the customer lifecycle.
It offers a chance of boosting your sales funnel and customer portfolio by re-acquiring customers who have previously closed their account or unsubscribed.
Improve your chances of success by carefully segmenting and filtering the customer data set.
Target those customers that fit your desired customer profile and where it makes sense to re-approach with your present product offering.
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Best regards,
Jens